With the advent of crowdsourcing, raising money toward manufacturing a product might seem like a simpler process these days.
“People put things on Kickstarter, and then they get a lot of interest and everyone wants to buy it,” Ilana Diamond says. So far so good.
“But they find out they can’t make it.”
Diamond is managing director of AlphaLab Gear, an East Liberty hardware accelerator that steers prospective entrepreneurs in the right direction. Launched in 2013, it differs from the affiliated AlphaLab, which primarily works with software companies.
“Every single company that comes through here has to make a physical product,” Christopher Millard, AlphaLab Gear program coordinator,” explains. “They might be selling data that they’re collecting with a piece of hardware, but they’re making something.”
The difference between software and hardware? If you make something in software, you can just replicate it, Diamond says. If you make something in hardware, that doesn’t mean you can manufacture it at volume. “What you’ve done is proved it can be made, but you haven’t proved that it can be made at scale, cost-effectively, with high quality, in a way that’s deliverable.”
In her opinion, AlphaLab Gear is in an optimal geographical position to accomplish its mission.
“What does Pittsburgh do well? We make stuff. And there are thousands of manufacturers within a couple of hours’ drive from Pittsburgh,” she says. “If you want to actually physically make something, you need a manufacturer. And having one a few blocks or a few miles, or even an hour or two away, is a huge advantage.”
Regional manufacturers are among the organizations that provide AlphaLab Gear with an extensive list of mentors who help guide startups through the steps necessary to bring viable products to market.
“You need someone who has experience with design for manufacturing, supply chain, distribution,” Millard says. “Really, the big thing is, you need a mentor network to support that. And you can’t just sort of pull that out of thin air.”
AlphaLab Gear conducts an annual eight-month cohort for a select group of eight companies, providing collaborative space, comprehensive instruction and mentorship support.
“They come with an idea or very early prototype, and we help them turn it into a business,” Diamond says. “Our value add is, A, the business model, helping them make it a fundable business, and then surrounding them with resources that will help them get there.”
Among the products under development in the 2015-16 cycle are an electric pedicab, carbon air freight container, medical devices and bridal accessories.
Companies that have completed the program also use the accelerator’s 10,000-square-foot facility as alumni residents. Among them is Maven Machines, a 2015 AlphaLab Gear graduate, where founder and chief executive officer Avi Geller has developed a product to help reduce trucking accidents.
“It’s a $600 billion industry, and they have a $30 billion problem with safety,” Sam Swerdlow of Murrysville, lead engineer for Maven, explains. “We put sensors inside of their headsets that they already use. That talk to an app on their phone, and we can figure things out, like if they’re checking their mirrors or if they’re falling asleep.”
Maven Machines and others had the opportunity to showcase their products for potential investors at Demo Day, which attracted some 800 people to Stage AE on the North Shore in June. This year’s event is scheduled for April 27th.
Between now and then, AlphaLab Gear will continue to work with companies to address a variety of considerations, including a business curriculum that covers marketing, finance, accounting and regulatory issues and how best to address the manufacture of products. The mentors will be there to guide.
Diamond commends the dedication of Pittsburgh-area mentors.
“It’s amazing to me that the people at the level you see on our mentor page, they are not just names on a page. They show up here. They roll up their sleeves, including people who founded huge companies and are really busy. And they are willing to meet with these people and share their experience, and they’re excited to do it.”
All photos by Brian Cohen.